NAB and ABS staff in insider trade bust

Georgia Wilkins and Ben Butler

National Australia Bank has moved to distance itself from an insider-trading scandal involving an employee arrested on Friday over allegations he and a friend at the Australian Bureau of Statistics used unreleased economic data to reap $7 million on currency markets.

Lukas Kamay, 26, and ABS employee Christopher Russell Hill, 24, were arrested on Friday after a sting operation mounted by Australian Federal Police.

The AFP operation was sparked when forex broker Pepperstone Financial reported Mr Kamay to the Australian Securities and Investments Commission shortly after he made his first trade on August 13 last year.

It is alleged Mr Kamay used Mr Hill's access to unreleased jobs, retail and trade data from the ABS to make bets on foreign exchange markets.

The young men are understood to be friends from university and are accused of using the sensitive information to ''predict fluctuations in the Australian dollar''.

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Pepperstone Financial chief executive Owen Kerr said Mr Kamay made his trades ''a microsecond'' before the ABS released official data.

The NAB sacked Mr Kamay on Friday morning. It said the charges did not relate to his work at the bank and that ''no NAB money or no NAB customer money is involved''.

''No NAB systems have been involved in any trading and no other NAB employee is involved,'' it said in a statement.

Chief executive Cameron Clyne added that while he could not disclose details of the case, the alleged activity was ''unlawful and completely unacceptable to NAB and our core values of doing the right thing by our customers, our shareholders and our staff."

According to his LinkedIn profile, Mr Kamay has a commerce degree from Monash University and joined NAB in September 2011 after a stint at JBWere as an intern and analyst.

He appeared at the Magistrates Court in Melbourne facing seven charges: three counts of insider trading, conspiring with Mr Hill to commit insider trading, offering to pay a bribe of between $50,000 and $60,000 to Mr Hill, using false documents to commission an offence and dealing with the proceeds of crime.

All the trades are alleged to have occurred last week - a bet on business approvals on Monday, retail trade on Wednesday and labour force on Thursday.

In a charge sheet filed with the Melbourne Magistrates Court, police alleged the conspiracy began in August last year. They allege Mr Kamay offered the bribe to Mr Hill in Box Hill on April 27 this year.

Police say it was during his time at university that Mr Kamay became friends with Mr Hill, who was working for the ABS in Canberra when the suspicious trades are alleged to have happened. The charges against Mr Hill are insider trading and receiving a corrupt benefit.

NAB said it has a strict code of conduct that all employees must adhere to as part of their employment and if NAB is aware that any employee has acted contrary to its code of conduct, ''we will take appropriate action''.

Police said they have uncovered $7 million in proceeds of crime in the form of residential property, bank accounts and a motor vehicle.

Mr Kamay appeared in the Melbourne Magistrates Court on Friday afternoon, where he was bailed on surety of $500,000 on the condition that he stay at his parents' home in Melbourne suburb Eaglemont, report to the Heidelberg police station every day and not attempt to leave Victoria or Australia. Federal Police have already seized his passport.